Weekly Diamond Market Report 17/12/17

Diamond market overview

Polished trading has slowed ahead of the end of year break in Western markets. There were positive reports in the main US market about consumer spending during the holiday sales season. According to reports, Americans are spending more than expected this holiday season, driven by income gains, confidence in the economic outlook, buoyant financial markets and modest inflation. Overall sales at online retailers, brick-and-mortar stores and restaurants rose a higher than expected 0.8% in November from the prior month, and up 5.8% from a year earlier. This was the largest yearly November increase since 2011. Meanwhile, in Hong Kong, diamond traders reported healthy demand in the dealer market, as retailers are stocking for the Chinese New Year festivities when consumers from mainland China go on a shopping spree. In the wholesale market, polished inventories have come down and traders are reporting tightening supplies in certain areas of polished, in particular in higher qualities. Although lagging polished prices remain a concern, fuelled by heavy discounting in the US by retailers. The main polishedprices index ended the week virtually flat, opening at 116.61 on Friday from Monday’s opening at 116.22.

Rough market

De Beers announced it sold $450 million at its last sight of the year. This compares to $466 million in December last year. ‘The year saw a continuation of good demand for De Beers rough diamonds as we head towards the end of 2017,” the leading rough diamond supplier said in a statement. However, De Beers’ full year sales performance at $5.31 billion is well below the previous year’s sales figure of $5.59 billion. Meanwhile, most traders in the secondary market are expecting a strong rebound in the New Year.

Corporate and events

The Antwerp World Diamond Centre (AWDC) and De Beers announced they are discussing a potential collaboration in De Beers’ recently announced blockchain platform. AWDC CEO Ari Epstein: “We have been exploring many initiatives to further our mission to boost business in the rough and polished diamond trade, as well as manufacturing. In addition to our B2B initiatives in this field, we have closely examined blockchain technology as a potential solution to strengthen compliance as a means to reinforce the banks’ trust into the diamond industry. Last year, we finalized a feasibility study that demonstrated how the blockchain could increase transparency and confidence. In October, we launched a public request for proposal, inviting the blockchain community to submit solutions, specifically targeted at the diamond industry.”

While De Beers CEO Bruce Cleaver sounded an upbeat note for the final sale of rough diamonds for the year, the full-year performance was well below the previous year’s, businesslive.co.za reported. But some analysts forecast a strong rebound in 2018, said the businesslive.co.za report. The provisional sales figure for the 10th and final sale of 2017 was $450m, the second-lowest total for the year in which the first sale reached $729m, a level that was not once challenged by subsequent sales. The 10th sale compared with $422m achieved in the same December period a year earlier and $466m in November 2017, the businesslive.co.za report said.